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Topic: How much money is needed to start investing with vanguard? (Read 20120 times)

Hi everybody,I am a newbie mustachian, and i have just starting to get my s**t together.I like the idea of investing in Vanguard. Vanguard is present in Denmark, however the impression i got from the introduction part of their website was more along the lines of: "if youre are not a pro investor, we cant/wont do business with you. The first pop-up window contained a notice saying the site was intended for companies, institutions and qualified traders and i had to agree to a license-agreement because some of the data content was "not intended for public use or distribution".I am not whining here, i am not sure how to proceed.

I am 40 years old, and the time to get to a happier place in life is now, and i know you can help me on my way.

$1000 is the entry fee for some mutual funds, $3000 for most and $5000+ for others in the US. The Vanguard ETF funds are mostly priced under $100 and can be purchased through a standard stock broker in the US, maybe also for Denmark. You probably should just call Vanguard and find out.

Being from Denmark and having spent quite a while trying to explore the possibilities of following much of the advice found here on MMM and on Jcollins, I think I can help you some of the way at least.

Vanguard do not have a Danish department - Only UK and US, from what I can see. That seems to mean that we can't open a Vanguard account, as you would do if you lived in the US. But what we can do is buy their funds as ETFs instead.My research indicated that Nordnet.dk has the lowest fees for buying US stocks, so I opened an account there and basically just bought a few of each - VTI (The ETF equivalent of VTSAX), BND (The ETF equivalent of VBTLX) and VNQ (The ETF equivalent of VGSLX).That seemed to worked without problem, and those 3 are the main ones recommended by JCollins.

So that is at least one way that you can follow the investment advice on putting your money in low-fee index funds.Now the REALLY tricky question is whether that advice is still a good idea from a Danish standpoint, because there are so many factors that can skew the overall result.

If you want to talk about it more, then send me a PM and we can perhaps discuss it through PMs or maybe start up another thread for future Danish mustachians to find. :-)

Hi FrankI live in France. If you want to invest with Vanguard, you can invest in the funds domiciled in Ireland, because they are EU funds. I am just starting this process too.

If you go to the Vanguard Global site, to the "contact" page, there is a phone number in Ireland where the lady was quite helpful. Yes there are more opportunities as an individual investor in the States, and as an institutional investor here, but we are still allowed access to some funds (not as much choice though)

As I said, I'm just starting this myself, and am trying to build the cash 'stache up again right now and hope to invest maybe by the fall.

Hope this helps, I know it's confusing, and a lot of the investing products that are available here in France are just worthless compared to what Vanguard has to offer. It's just a matter of being a bit more wily than other uninformed people ; )

I am beginning the Vanguard voyage myself (see what I did there, ha). I have been research which is the best site to buy mutual funds from and so far after about 6 hours of research, Vanguard is still in the lead.

Hi FrankI live in France. If you want to invest with Vanguard, you can invest in the funds domiciled in Ireland, because they are EU funds. I am just starting this process too.

If you go to the Vanguard Global site, to the "contact" page, there is a phone number in Ireland where the lady was quite helpful. Yes there are more opportunities as an individual investor in the States, and as an institutional investor here, but we are still allowed access to some funds (not as much choice though)

I live in Spain (though I am probably moving to France in the near future). I tried to walk that route with Vanguard Ireland in the past and was unsuccessful. It was something like contacting Vanguard UK, they sending me to Vanguard Ireland, from there to JP Morgan and then... nothing. I would be very grateful if you share any progress that you make in this regard as I thought it just was an impossible path but I am still interested.

It is very interesting to hear what other Europeans have done to try and follow the investment advice found here and on JCollins for instance.One thing that I am curious of though, is why you, Psychomoustache (& Freestyler), have not just bought the ETF versions of the index funds recommened on MMM & JCollins?

If I understand your posts correctly, it sounds like you are restricting yourself to Vanguards EU funds, if you try and open an account with Vanguards UK department?

It would be extremely interesting if we could gather all experiences from various European perspectives, and perhaps ensure that future Mustachians will know what to do, because it sure isn't easy to find out what is the best way to go about following the investment advice here. :-)

One thing that I am curious of though, is why you, Psychomoustache (& Freestyler), have not just bought the ETF versions of the index funds recommened on MMM & JCollins?

If I understand your posts correctly, it sounds like you are restricting yourself to Vanguards EU funds, if you try and open an account with Vanguards UK department?

It would be extremely interesting if we could gather all experiences from various European perspectives, and perhaps ensure that future Mustachians will know what to do, because it sure isn't easy to find out what is the best way to go about following the investment advice here. :-)

Here in Spain if I use ETFs I would be charged various brokerage fees (deposit or "custodia", buying and selling, etc) on top of the charges of the ETF itself. In addition to that, regulations in Spain make ETFs far more fiscally inefficient than funds. I did the calculations and for a long term portfolio (mine is the longest term possible) I am much better off with funds. I can keep on rolling from one fund to another and postponing tax paying for as long as I want. I can´t do the same with ETFs and also would pay taxes for any dividend received (so I choose accumulation assets). Every step I take with ETFs I have to pay, so they have way more (clumsily) hidden costs. So I am better off with apparently more expensive Pictet and Amundi funds than with Vanguard ETFs.

Here in Spain if I use ETFs I would be charged various brokerage fees (deposit or "custodia", buying and selling, etc) on top of the charges of the ETF itself. In addition to that, regulations in Spain make ETFs far more fiscally inefficient than funds. I did the calculations and for a long term portfolio (mine is the longest term possible) I am much better off with funds. I can keep on rolling from one fund to other and postponing tax paying for as long as I want. I can´t do the same with ETFs and also would pay taxes for any dividend received (so I choose accumulation assets). Every step I take with ETFs I have to pay, so they have way more (clumsily) hidden costs. So I am better off with apparently more expensive Pictet and Amundi funds than with Vanguard ETFs.

I am also concerned with all the fiscal and financial fuss caused by me eventually working and leaving at different EU (an non EU) countries. Americans have it so much easier... ;-).

That's quite interesting.Of course I too get charged fees for buying stocks(ETF's), but it didn't seem too bad, although I haven't done any indept calculations on what it'd amount over time.Hmm, think we could use the Questrade that has been recommended elsewhere? They are supposedly not charging for buying ETFs, but then again, one might have to pay currency-exchange fees instead?

I would be interested in hearing why ETF's a bad deal in Spain, especially if the Vanguard ETF's are a worse choice than local, more expensive (index?)funds.

But perhaps all this would be better suited for a thread specifically on European investment advice, so that people can find the information again, if they look through the forum.And yea - Americans have it so much easier when it comes to this - Not just rules-wise, but also the amount of advice around is 90% US-centric, so it's really difficult to find out what is actually a good idea and what isn't, if you live in another country with (perhaps vastly) different laws and options.

I just registered to second this. I've been finding it increasingly frustrating to follow the investment advice I read in MMM because it's so US-centric. I'm from Portugal and my basic understanding of finance has gotten me nowhere. So yes - why not open a thread on european investment? I'd do it myself, but I guess it's best to leave it to a more seasoned MMM forum user : o)

I just registered to second this. I've been finding it increasingly frustrating to follow the investment advice I read in MMM because it's so US-centric. I'm from Portugal and my basic understanding of finance has gotten me nowhere. So yes - why not open a thread on european investment? I'd do it myself, but I guess it's best to leave it to a more seasoned MMM forum user : o)

To the contrary-- if you have specific questions, the best way to go about it is to start a thread. If you're lucky, you'll get the critical mass of portuguese viewers required to generate some answers. Worst case, you could always use it as a journal while you figure things out, and leave it as a resource to other investors afterwards.

I just registered to second this. I've been finding it increasingly frustrating to follow the investment advice I read in MMM because it's so US-centric. I'm from Portugal and my basic understanding of finance has gotten me nowhere. So yes - why not open a thread on european investment? I'd do it myself, but I guess it's best to leave it to a more seasoned MMM forum user : o)

Hi there, I just registered for the exact same reason; European, been living in different EU countries and, as my nickname implies, almost complete newbie when it comes to financial & investing literacy.

Did you (or anyone else) start that thread on european investment after all? If not I'd be happy to do it.

Hi there, I just registered for the exact same reason; European, been living in different EU countries and, as my nickname implies, almost complete newbie when it comes to financial & investing literacy.

Did you (or anyone else) start that thread on european investment after all? If not I'd be happy to do it.

Personally, I am stuck just as I have been the last year or so.I have asked around in quite a few places, and searched many, many more places, but I have yet to find enough information to make me certain what to invest in and how to do it.So our savings are still just in the bank to a pathetic 0,25% interest rate.

I probably wouldn't even attempt to invest through Vanguard, honestly. I'd just buy the ETFs at the cheapest broker I could find. Vanguard isn't really known for their excellent customer service, anyway.

In the UK there are a number of "discount brokerages" as they are called here, or share dealing services. Online brokers.

Find one in the country you live in - ideally one that allows ETF purchases as cheaply as possible! If you have something tax-sheltered available to you, do some research with your government, and open and use those tax-sheltered accounts.

For example the UK has an "ISA" where you can buy stocks (as well as just save money) and hold them tax free. This is "after tax" money; we also have various pension things, where you basically get your income tax back on the money you put in - but you will get taxed on it in retirement.

The reason for doing this research is to figure out if you can hold foreign investments in that account, tax free. In Canada, you can put things into the *pension* side of things and get zero withholding tax from the US side; if you put it into the TFSA (the equivalent of the ISA in Canada - it's after-tax money), the US will take 15 or 30% withholding tax on dividends!

Now - for people in the Eurozone - I suspect you want to look at DB Xtracker stuff as they are.. wait for it... MER (fee) free. Or at least some of them are!

For example I hold some XESX.L which tracks the STOXX 50 index - 50 largest Eurozone companies, I think it is. There are no fees on this!

So:

Find a discount/online broker in your country;Sign up - open, ideally, the equivalent of an ISA (UK) or TFSA (Canada);Open a 'normal' account too - usually, DOMESTIC (to you!) stocks will give some kind of tax break - if you have more money than will fit in whatever tax shelters you have available;The other usual advice applies - put things that will be taxed 'worst' into the tax shelters. IE, leave the things with tax breaks (usually domestic stocks!) OUTSIDE the tax shelters.

I suspect you will be able to buy ETFs from the German and French markets even if you live in other Eurozone countries, as there are no currency issues for you. For me, XESX.L is in pounds sterling, but domiciled in Ireland. Have a look at the DB website and see what they have.

I don't know where else, but you could probably buy the Vanguard UK ETFs - VUKE.L, for example.

I probably wouldn't even attempt to invest through Vanguard, honestly. I'd just buy the ETFs at the cheapest broker I could find. Vanguard isn't really known for their excellent customer service, anyway.

Can you show that etfs are are better way? And I have personally found vanguard excellent, in all regards, including customer service.

ETFs vs mutual funds is ok for those with no other way, others can just ask vanguard here

Hi everybody,I am a newbie mustachian, and i have just starting to get my s**t together.I like the idea of investing in Vanguard. Vanguard is present in Denmark, however the impression i got from the introduction part of their website was more along the lines of: "if youre are not a pro investor, we cant/wont do business with you. The first pop-up window contained a notice saying the site was intended for companies, institutions and qualified traders and i had to agree to a license-agreement because some of the data content was "not intended for public use or distribution".I am not whining here, i am not sure how to proceed.

I am 40 years old, and the time to get to a happier place in life is now, and i know you can help me on my way.

I look forward to your advice.

Best regards-Frank

Maybe you weren't in the right area of their site? They have a personal investor section for investors looking to open personal accounts. It's available here: https://investor.vanguard.com/home/. Note that is the US variation of the site. I have no idea how it works in Denmark.

Personally, I have a Roth IRA with them, and I just opened a personal brokerage account today. The minimum investment for the fund I chose (Vanguard LifeStrategy Growth Fund -- VASGX) was $3000.

As a Danish taxpayer, I would only recommend Vanguard for retirement savings.

The Danish tax rules discriminate against foreign investment fonds since it will be hit by "lagerbeskatning" which means that there is taxation of unrealized gains.

This does not matter when we talk retirement savings since all gains are taxed the same way (15,3%)

Personally I use Nordnet (no fees) for retirement savings - they don't offer investing in Vanguard funds, but instead, you can choose iShares from Black Rock (0.5% in equity funds and 0.2% in bond funds)

Savings in taxed money - here the best offer probably is "sparindex" - I think this is the cheapest option among the Danish investment funds. Personally I use Nordnet here as well - but have my money invested in individual stocks.

As a Danish taxpayer, I would only recommend Vanguard for retirement savings.

The Danish tax rules discriminate against foreign investment fonds since it will be hit by "lagerbeskatning" which means that there is taxation of unrealized gains.

This does not matter when we talk retirement savings since all gains are taxed the same way (15,3%)

Personally I use Nordnet (no fees) for retirement savings - they don't offer investing in Vanguard funds, but instead, you can choose iShares from Black Rock (0.5% in equity funds and 0.2% in bond funds)

Savings in taxed money - here the best offer probably is "sparindex" - I think this is the cheapest option among the Danish investment funds. Personally I use Nordnet here as well - but have my money invested in individual stocks.

Thank you for the reply!

That is what I feared, and had hoped that there would be a way around it, because the Danish index funds have a fee of 0,5% or more, which is alot more than Vanguards 0,06 for instance. That is not to speak of whether or not one can even get the same exposure through a Danish index fund as you can via Vanguard.

But even with the discrimination, might it not be better to pay 42% on our investments in Vanguard, than paying 27 to 42% on investing in a Danish index fund that also have 10 times higher fees – About 0,5+% vs Vanguards 0,06%?

I have an account at Nordnet as well, but so far I've only used it to buy a few Vanguard EFTs as a test. But it does seem like the best site to use with it's lower fees, especially on foreign/US stocks. If you have any experiences to share with using Nordnet, I would certainly also be interested in hearing them.

As the retirement age in Denmark will probably be around 70, when I get to that point, I have been hesitant to open a personal pension savings fond, because I hope that we would be FI before then...But maybe not. Or maybe it would be wise to create one regardless of having one through my employer already?

That is what I feared, and had hoped that there would be a way around it, because the Danish index funds have a fee of 0,5% or more, which is alot more than Vanguards 0,06 for instance. That is not to speak of whether or not one can even get the same exposure through a Danish index fund as you can via Vanguard.

But even with the discrimination, might it not be better to pay 42% on our investments in Vanguard, than paying 27 to 42% on investing in a Danish index fund that also have 10 times higher fees – About 0,5+% vs Vanguards 0,06%?

I have an account at Nordnet as well, but so far I've only used it to buy a few Vanguard EFTs as a test. But it does seem like the best site to use with it's lower fees, especially on foreign/US stocks. If you have any experiences to share with using Nordnet, I would certainly also be interested in hearing them.

As the retirement age in Denmark will probably be around 70, when I get to that point, I have been hesitant to open a personal pension savings fond, because I hope that we would be FI before then...But maybe not. Or maybe it would be wise to create one regardless of having one through my employer already?

I have made a simple spread sheet for at 10 year investing case:

Annual investment 25kReturn on investment: 7%Fee 0.5 % vs. 0.06 %Tax Flat 37% (I believe the average tax rate in most cases would be lover when investing in Danish index funds => you might want / need to make a more specific case…

So nearly the same after tax result – but this haven’t taken into account that you risk being hit by more unfairness in the Danish tax system – positive investment income are taxed higher than negative income probably deducts your tax bill. This does of course depend on all your other income/deductions. No one ever said Danish tax is easy.

Nordnet – agree best provider to use in Denmark if you want foreign stocks / fonds. I mostly buy individual stocks, but will be happy to try answering any questions. Regarding setting up a personal pension saving fund, when you already have one through your employer – it depends… Level of income, amount being paid into your employer pension fund, when you plan to retire, spending, net worth etc.

I personally plan to retire before turning 40 (I’m 34) and still contribute to pensions funds (allowed to withdraw when turning 60) – but it really depends. I firmly believe that you are always allowed to pay taxes, so I try to wait as long as possible to pay these, earning income on the deferred taxes.

Thanks for sharing the numbers!If you don't mind, I would love to see your spreadsheet. I would like to plot in the numbers for the worst case scenario, where we pay 26% tax on the Danish investments with a fee of 0,51% vs 46% tax on Vanguard at 0,06% fee.

Apart from that I am not sure any of the current Danish (Sparinvest/Sparindex) index funds actually can give you the same exposure as the Vanguard ones, especially the VTSAX, VBTLX and VGSLX that Jcollins recommended.I have eyeing the Danish index OMX C20 fund, but again it seems that at the moment at least the US are the economy that has the most going for it.If you or anyone else have any experience with and advice for the Danish index funds, I would love to hear them :)

I'd also like to hear about your retirement plan for being FI at 40. I am 36 at the moment, and even with no debt and less than 40k $ in savings, I don't dare dream of being FI within the next 10 years. I hope, but I have not yet seen the numbers that indicate that we can do it realisticly - At least with our current lifestyle, of saving about 40~% of our income.What have you done in terms in pension funds, investments and so forth - If you don't mind sharing I would like to hear about your plan in general :-)

Once again, thank you for taking the time to answer these questions!I know I'm a bit lost when it comes to investing, though I'm trying to learn even if the Danish laws are not easy to figure out.

Thanks for sharing the numbers!If you don't mind, I would love to see your spreadsheet. I would like to plot in the numbers for the worst case scenario, where we pay 26% tax on the Danish investments with a fee of 0,51% vs 46% tax on Vanguard at 0,06% fee.

Apart from that I am not sure any of the current Danish (Sparinvest/Sparindex) index funds actually can give you the same exposure as the Vanguard ones, especially the VTSAX, VBTLX and VGSLX that Jcollins recommended.I have eyeing the Danish index OMX C20 fund, but again it seems that at the moment at least the US are the economy that has the most going for it.If you or anyone else have any experience with and advice for the Danish index funds, I would love to hear them :)

I'd also like to hear about your retirement plan for being FI at 40. I am 36 at the moment, and even with no debt and less than 40k $ in savings, I don't dare dream of being FI within the next 10 years. I hope, but I have not yet seen the numbers that indicate that we can do it realisticly - At least with our current lifestyle, of saving about 40~% of our income.What have you done in terms in pension funds, investments and so forth - If you don't mind sharing I would like to hear about your plan in general :-)

Once again, thank you for taking the time to answer these questions!I know I'm a bit lost when it comes to investing, though I'm trying to learn even if the Danish laws are not easy to figure out.

If you provide me with your email in a PM I’ll send the spreadsheet (nothing fancy).

Unfortunately, I am no great expert when it comes to index funds (I know the tax rules) – but try to have a look at their (Sparindex) homepage – and compare to the Vanguard Funds.

My plan for Early Retirement – long story short…

• I have always spent less then I have earned. • First paycheck arrived at age 9! • First full time job at age 20 (studied in the evenings). • Bought Rental Property at age 25 (condo). • “Stupid” moves – bought new car at age 24 (40 % cash 60 % loan), GF and I bought our house in late 2007 :-/• Never paid the highest tax rates (putting these earnings to pension savings and entrepreneur savings).• I have a nice salary (not exceptional)• Some small side income hustles • Current saving rate 66% (including tax deferred savings and mortgage repayment)• GF 29, we plan and budget for two kids – GF will not be able to retire as early as me (this is something we are working on). We don’t have joint accounts/savings.• Our budget does not include any government pensions (I don’t want to rely on this)